{"id":114565,"date":"2015-02-16T19:12:39","date_gmt":"2015-02-17T02:12:39","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/reform-of-public-workers-retirement-is-debated\/"},"modified":"2015-02-16T19:12:39","modified_gmt":"2015-02-17T02:12:39","slug":"reform-of-public-workers-retirement-is-debated","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/reform-of-public-workers-retirement-is-debated\/","title":{"rendered":"Reform of public workers\u2019 retirement is debated"},"content":{"rendered":"\n

\"Roberts\"
Roberts<\/span><\/figcaption><\/figure>\n<\/p>

DENVER \u2013 A seemingly mundane conversation Friday in the Colorado Senate about retirement reform turned into a political debate.<\/p>\n

Senate Republicans gave initial approval to a measure that would allow all public employees to participate in the Public Employees\u2019 Retirement Association defined contribution plan.<\/p>\n

Only select employees \u2013 such as lawmakers \u2013 are allowed to participate in the defined contribution plan since it tends to favor short-term state employees.<\/p>\n

Most employees must participate in a defined benefit retirement plan.<\/p>\n

The difference between the two comes down to how retirement benefits are calculated for the state\u2019s hundreds of thousands of current and former public employees.<\/p>\n

In a defined benefit plan, benefits are based on a formula and are paid monthly for life. The calculation is based on the employee\u2019s age and salary at retirement.<\/p>\n

In a defined contribution plan, benefits are determined by investment earnings and losses. Employees in this plan risk outliving their investments, but they make their own investment decisions.<\/p>\n

Sen. Owen Hill, R-Colorado Springs, the bill\u2019s sponsor, said the measure is about offering options.<\/p>\n

\u201cThis is not doing anything other than giving a choice that already exists to the rest of us,\u201d Hill said during remarks on the Senate floor.<\/p>\n

Sen. Ellen Roberts, R-Durango, said she chose the defined contribution option for herself.<\/p>\n

\u201cThis is a bill about choice, it is about having the beneficiary drive it,\u201d Roberts said. \u201cI recognize that I am making choices and driving the future of my retirement.\u201d<\/p>\n

Interest in PERA peaked as reports revealed that the system is carrying at least $25 billion in unfunded liabilities. Lawmakers addressed its stability in 2010 by requiring an increase in the employer and employee contribution rates to PERA, as well as a limit on the annual cost-of-living increase.<\/p>\n

But Hill said the system is still unstable, and that employees should have the option of controlling their own investments.<\/p>\n

\u201cThe notion right now that PERA is this bastion of stability is unfortunately ill founded,\u201d Hill said.<\/p>\n

Democrats, however, were in a tizzy over the measure. They pointed to a fiscal analysis that indicated that the change would increase PERA\u2019s unfunded liabilities.<\/p>\n

State fiscal analysts said the bill could add about $4.2 billion to PERA\u2019s unfunded liability.<\/p>\n

\u201cIt takes us in the wrong direction,\u201d Senate Democratic Leader Morgan Carroll of Aurora said of the bill. \u201cIt reduces retirement security.\u201d<\/p>\n

Democrats worry that the measure would result in uncertain benefits because calculations would be based on investment gains and losses.<\/p>\n

\u201cWe are tying the fate of thousands and thousands of hard working Coloradans to the whims and tides of Wall Street,\u201d Carroll said.<\/p>\n

Greg Smith, PERA\u2019s executive director, told lawmakers during an earlier committee hearing that they should think of the current system as a hybrid of defined benefit and contribution plans. He said employees see a benefit associated with the dollars they pay into the system, similar to a defined contribution plan.<\/p>\n

He added that employees benefit from a guaranteed return, which now is about 3 percent under the current system.<\/p>\n

\u201cThis system allows them to never have to make a choice,\u201d Smith said. \u201cThey get that benefit from day one of employment in PERA, and they don\u2019t have to make a choice all the way until they\u2019re 65, and they get that coverage in that hybrid feature.\u201d<\/p>\n

Republicans, however, were steadfast that the current system is already broken, so employees need choice.<\/p>\n

Sen. Kevin Lundberg, R-Berthoud, went as far as to compare PERA to a \u201cPonzi scheme.\u201d<\/p>\n

\u201cYou\u2019re always relying on someone else to come in and provide the funds for the outflow today,\u201d Lundberg said. \u201cTo me, it\u2019s much more appropriate to allow individual employees to choose what they think is best.\u201d<\/p>\n

\n

This week<\/h4>\n

Budget talks: The Democratic House and Republican Senate will continue a back-and-forth over small items in supplemental budget bills \u2013 especially GOP efforts to tackle state agency spending on gun background checks and driver\u2019s licenses for immigrants in the country illegally.
\n Voting and photo ID: The GOP wants to require photo ID for same-day voter registration. Two bills in a House committee Wednesday tackle the issue, but they\u2019re both likely doomed in the Democrat-led committee.
\n Juvenile shackling: Lawmakers worried about restraints used on juvenile offenders want to change such policies in judicial districts, such as when juveniles can be shackled in court.
\n Perks for veterans: Vets would get free admission to state parks for a three-day weekend before or after Veteran\u2019s Day annually with a bill making its way through the Senate. It has its first hearing there in a committee Wednesday. The bill has cleared the House.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Parties divided over how to manage benefits<\/p>\n","protected":false},"author":1,"featured_media":114566,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5736,5735],"tags":[94,13,2760],"naviga_topic":[],"class_list":["post-114565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-local-news","category-news","tag-colorado-state-government","tag-frontpage-lead","tag-retirement"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/114565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=114565"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/114565\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/114566"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=114565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=114565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=114565"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=114565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}